Operating income increased 26% to $510 million in the fourth quarter,
compared with $405 million in fourth quarter 2012. The favorable impact
from year-over-year changes in foreign exchange rates throughout the
quarter on operating income was $7 million.

Net income increased to $239 million in the fourth quarter, or $0.51 per
diluted share, compared with $97 million, or $0.21 per diluted share, in
fourth quarter 2012.

“It’s a good time to be an Amazon customer. You can now read your Kindle
gate-to-gate, get instant on-device tech support via our revolutionary
Mayday button, and have packages delivered to your door even on
Sundays,” said Jeff Bezos, founder and CEO of Amazon.com. “In just the
last weeks, Forrester, YouGov, and ForeSee have all ranked Amazon #1 –
and we believe we’re just scratching the surface of what world-class
customer service can be.”

Operating income increased 10% to $745 million, compared with $676
million in 2012. The unfavorable impact from year-over-year changes in
foreign exchange rates throughout the year on operating income was $29
million.

Net income was $274 million, or $0.59 per diluted share, compared with
net loss of $39 million, or $0.09 per diluted share, in 2012.

Highlights

Amazon announced a record-setting holiday season for Amazon Prime, the
annual membership program with tens of millions of members worldwide.
Amazon is working hard to increase capacity for the Prime program. In
December, Prime was so popular that Amazon limited new Prime
membership signups during peak periods.

Prime Instant Video selection increased from 33,000 to more than
40,000 movies and TV episodes in 2013.

Selection in the Kindle Owners’ Lending Library in 2013 grew from
250,000 books to more than 475,000 books-books that Kindle owners with
a Prime membership can borrow for free with no due dates.

Amazon worked with the FAA to update its rules on the use of
electronic devices on planes and now over 20 airlines allow customers
to use their Kindles gate-to-gate.

Amazon announced that on Christmas Day, the average response time when
a customer tapped the Mayday button on Kindle Fire HDX was just 9
seconds, faster than the response time goal of 15 seconds. Thousands
of Mayday Tech Advisors in the U.S. were available on Christmas Day to
take calls from customers.

Amazon announced a new version of Kindle FreeTime on Kindle Fire
tablets that brings new educational features built from the ground up
for parents and kids. The new features let parents set educational
goals for their kids before switching to cartoons or games. Parents
can also manage screen time with additional Time Limits features: set
different limits for weekends vs. weekdays, and use “Bedtime” to set a
curfew.

Amazon announced a software update for the new Kindle Paperwhite that
brings exclusive features including Goodreads integration and Kindle
FreeTime.

Amazon launched the Australian Kindle Store, offering over 2 million
eBooks, including more than 400,000 Kindle-exclusive titles.

Amazon launched Kindle MatchBook, a new benefit that gives customers
the option to buy – for $2.99, $1.99, $0.99 or free – the Kindle
edition of the print books they have purchased from Amazon, including
more than 100,000 titles.

Since its launch one year ago, Amazon AutoRip has delivered more than
2 billion digital music tracks to customers who have purchased AutoRip
albums. The digital copy is automatically added to the customer’s
Cloud Player library where it is available, free of charge, for
immediate playback or download.

Amazon Instant Video announced it is working with the world’s leading
consumer electronics companies, top Hollywood studios and TV
programmers, including Samsung, Warner Bros., Lionsgate, 20th Century
Fox, Discovery and others to offer customers a premium 4K Ultra HD
experience. In addition, Amazon Studios announced that it plans to
shoot all 2014 full original series, including comedies and dramas, in
4K Ultra HD.

Amazon Studios debuted new original series Alpha House and Betas.
The first three episodes are available for all customers to enjoy,
with the remaining episodes available exclusively on Prime Instant
Video.

Amazon Prime Instant Video will be the exclusive premium subscription
home for Extant, a serialized drama starring Halle
Berry and produced by Steven Spielberg’s Amblin Television. The drama
will premiere on the CBS Television Network in June with unlimited
streaming of all the series’ episodes available four days after their
initial broadcast on CBS.

Amazon launched AmazonSmile, a new program that makes it easy for
customers to support their favorite charitable organizations every
time they shop. Customers who visit AmazonSmile (smile.amazon.com)
will find the exact same Amazon they know and love, with the added
bonus that Amazon will donate a portion of the purchase price to their
favorite charitable organization. There is no cap on the total
donation amount and customers can choose from nearly one million
organizations around the country.

During the quarter, Amazon Web Services (AWS) announced over 100 new
services and features, including Amazon AppStream, Amazon Kinesis, and
three new Amazon Elastic Compute Cloud (Amazon EC2) instances. AWS now
offers six Amazon EC2 instance families with 13 instance types to
support a wide range of use-cases.

AWS announced Amazon WorkSpaces, a fully managed desktop computing
service in the cloud that allows end-users to access the documents,
applications and resources they need with the device of their choice,
including laptops, iPad, Kindle Fire, and Android tablets.

The AWS Partner Network program, which provides technical, business
and marketing support for the AWS partner ecosystem, has grown to more
than 8,000 technology and consulting partners worldwide. In addition,
AWS Marketplace now offers over 1,100 third-party software products
for customers to choose from.

AWS announced the upcoming launch of its China Region. This will be
the fourth AWS Region in Asia Pacific and the tenth Region globally.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s
expectations as of January 30, 2014, and are subject to substantial
uncertainty. Our results are inherently unpredictable and may be
materially affected by many factors, such as fluctuations in foreign
exchange rates, changes in global economic conditions and consumer
spending, world events, the rate of growth of the Internet and online
commerce, and the various factors detailed below.

First Quarter 2014 Guidance

Net sales are expected to be between $18.2 billion and $19.9 billion,
or to grow between 13% and 24% compared with first quarter 2013.

Operating income (loss) is expected to be between $(200) million and
$200 million, compared to $181 million in first quarter 2013.

This guidance includes approximately $350 million for stock-based
compensation and amortization of intangible assets, and it assumes,
among other things, that no additional business acquisitions,
investments, restructurings, or legal settlements are concluded and
that there are no further revisions to stock-based compensation
estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and
will be available for at least three months at www.amazon.com/ir. This
call will contain forward-looking statements and other material
information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict.
Actual results could differ materially for a variety of reasons,
including, in addition to the factors discussed above, the amount that
Amazon.com invests in new business opportunities and the timing of those
investments, the mix of products sold to customers, the mix of net sales
derived from products as compared with services, the extent to which we
owe income taxes, competition, management of growth, potential
fluctuations in operating results, international growth and expansion,
the outcomes of legal proceedings and claims, fulfillment and data
center optimization, risks of inventory management, seasonality, the
degree to which the Company enters into, maintains, and develops
commercial agreements, acquisitions and strategic transactions, payments
risks, and risks of fulfillment throughput and productivity. Other risks
and uncertainties include, among others, risks related to new products,
services, and technologies, system interruptions, government regulation
and taxation, and fraud. In addition, the current global economic
climate amplifies many of these risks. More information about factors
that potentially could affect Amazon.com’s financial results is included
in Amazon.com’s filings with the Securities and Exchange Commission
(“SEC”), including its most recent Annual Report on Form 10-K and
subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage
investors to use it as a way of easily finding information about us. We
promptly make available on this website, free of charge, the reports
that we file or furnish with the SEC, corporate governance information
(including our Code of Business Conduct and Ethics), and select press
releases and social media postings.

About Amazon.com

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle,
opened on the World Wide Web in July 1995 and today offers Earth’s
Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most
customer-centric company, where customers can find and discover anything
they might want to buy online, and endeavors to offer its customers the
lowest possible prices. Amazon.com and other sellers offer millions of
unique new, refurbished and used items in categories such as Books;
Movies, Music & Games; Digital Downloads; Electronics & Computers; Home
& Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health &
Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web
Services provides Amazon’s developer customers with access to
in-the-cloud infrastructure services based on Amazon’s own back-end
technology platform, which developers can use to enable virtually any
type of business. Kindle Paperwhite is the world’s best-selling and most
advanced e-reader. It features new display technology with higher
contrast, the next generation built-in light, a faster processor, the
latest touch technology, and exclusive new features designed from the
ground up for readers. Kindle, the lightest and smallest Kindle,
features improved fonts and faster page turns. The new Kindle Fire HDX
features a stunning exclusive 7” or 8.9” HDX display, a quad-core 2.2
GHz processor, 2x more memory, and 11 hours of battery life, as well as
exclusive new features of Fire OS 3.0 including X-Ray for Music, Second
Screen, Prime Instant Video downloads, and the revolutionary new Mayday
button. The all-new Kindle Fire HD includes an HD display,
high-performance processor and dual speakers at a breakthrough price.

Includes sales from non-retail activities, such as AWS sales,
which are included in the North America segment, and advertising
services and our co-branded credit card agreements, which are
included in both segments.

References to customers mean customer accounts, which are unique
e-mail addresses, established either when a customer places an order
or when a customer orders from other sellers on our websites. Customer
accounts exclude certain customers, including customers associated
with certain of our acquisitions, Amazon Payments customers, Amazon
Web Services customers, and the customers of select companies with
whom we have a technology alliance or marketing and promotional
relationship. Customers are considered active when they have placed an
order during the preceding twelve-month period.

Seller Accounts

References to sellers means seller accounts, which are established
when a seller receives an order from a customer account. Sellers are
considered active when they have received an order from a customer
during the preceding twelve-month period.

Registered Developers

References to registered developers mean cumulative registered
developer accounts, which are established when potential developers
enroll with Amazon Web Services and receive a developer access key.

Units

References to units mean physical and digital units sold (net of
returns and cancellations) by us and sellers at Amazon domains
worldwide – for example www.amazon.com, www.amazon.co.uk,
www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca,
www.amazon.cn, www.amazon.it, www.amazon.es, www.amazon.com.br,
www.amazon.in, www.amazon.com.mx, www.amazon.com.au, www.diapers.com,
www.shopbop.com and www.zappos.com – as well as Amazon-owned items
sold through non-Amazon domains. Units sold are paid units and do not
include units associated with certain acquisitions, rental businesses,
web services or advertising businesses, or Amazon gift certificates.